Compound Interest Calculator
Enter an initial amount, a monthly contribution, a rate and a number of years to see the final balance and how much of it is interest.
Result
- Total contributions
- 29,000.00
- Total interest
- 43,286.36
- Share of the balance that is interest
- 59.9%
- Rates are not guaranteed. Real returns change from year to year, and fees and tax are not included.
| Year | Contributions | Interest | Balance |
|---|---|---|---|
| 1 | 6,200.00 | 400.71 | 6,600.71 |
| 2 | 7,400.00 | 917.13 | 8,317.13 |
| 3 | 8,600.00 | 1,557.64 | 10,157.64 |
| 4 | 9,800.00 | 2,331.19 | 12,131.19 |
| 5 | 11,000.00 | 3,247.42 | 14,247.42 |
| 6 | 12,200.00 | 4,316.62 | 16,516.62 |
| 7 | 13,400.00 | 5,549.87 | 18,949.87 |
| 8 | 14,600.00 | 6,959.01 | 21,559.01 |
| 9 | 15,800.00 | 8,556.78 | 24,356.78 |
| 10 | 17,000.00 | 10,356.79 | 27,356.79 |
| 11 | 18,200.00 | 12,373.67 | 30,573.67 |
| 12 | 19,400.00 | 14,623.10 | 34,023.10 |
| 13 | 20,600.00 | 17,121.89 | 37,721.89 |
| 14 | 21,800.00 | 19,888.07 | 41,688.07 |
| 15 | 23,000.00 | 22,940.96 | 45,940.96 |
| 16 | 24,200.00 | 26,301.30 | 50,501.30 |
| 17 | 25,400.00 | 29,991.30 | 55,391.30 |
| 18 | 26,600.00 | 34,034.80 | 60,634.80 |
| 19 | 27,800.00 | 38,457.35 | 66,257.35 |
| 20 | 29,000.00 | 43,286.36 | 72,286.36 |
How to use Compound Interest Calculator
- Enter your initial investment and a monthly contribution, or 0 for none.
- Enter the annual interest rate and how many years the money will grow.
- Choose the compounding frequency.
- Read the final balance, the total interest and the share of the balance that came from interest.
About this tool
Compound interest is interest earned on interest. Each time interest is added, the balance is bigger, so the next interest payment is bigger too. Over a short period the effect is small, but over decades it becomes the main source of growth.
The calculator shows what share of the final balance is interest, which makes this effect visible. With a 20 year horizon, the interest share is often larger than the total you put in, though that depends on the rate and the contributions.
The compounding frequency tells the calculator how often interest is added within a year. A stated rate of 12% compounded monthly is 1% a month, and it grows to slightly more than 12% over a year, which is why compounding is also described by an effective annual rate.
How it is calculated
Without contributions, final balance = P × (1 + r/m)^(m × t), where P is the initial amount, r is the annual rate as a decimal, m is the number of compounding periods per year and t is the number of years.
With monthly contributions, the calculator uses the equivalent monthly rate and adds each contribution at the end of the month.
Worked examples
- Start with 5,000 and add 100 a month for 20 years at 7% compounded monthly: the final balance is 72,286.36. You contribute 29,000.00 in total, so 43,286.36 is interest, or 59.9% of the balance.
- 1,000 at 12% compounded monthly for one year ends at 1,126.83, which is 12.68% more than you started with, not exactly 12%.
Tips for better results
- Make one contribution amount and one rate your baseline, then change a single input at a time.
- Compare an interest rate that is quoted as APY with one quoted as a nominal rate. They are not the same number.
- Remember that real returns vary, and a higher assumed rate is not a safer assumption.
Frequently asked questions
What is compound interest?
It is interest calculated on both the original amount and the interest that has already been added.
How is it different from simple interest?
Simple interest is calculated only on the original amount. Compound interest grows faster because earlier interest also earns interest.
Which compounding frequency should I choose?
Use the one your account states. Monthly is common for savings, and the difference to daily is small.
Can I use it for a loan?
Use the Loan Calculator for loans, because it works out repayments instead of growth.
Are my numbers saved or sent anywhere?
No. The calculation runs in your browser on your own device. Nothing you type is sent to Paul Digital or any other server.
Related tools
- Future Value Calculator
- TVM Calculator (Time Value of Money)
- ROI Calculator (Return on Investment)
- Loan Calculator
- All web tools
Privacy
The calculation runs in your browser on your own device. The numbers you type are not sent to Paul Digital or any other server. Results are estimates from the numbers you enter and are not financial, tax or legal advice.